Analyst Articles – Forex News 24

Crude Oil Price Continues to March Higher on Chinese Data, Inventories
Will Global Growth Rebound if the US-China Trade War Ends?
AUDUSD Outlook Positive After Firm Chinese Data
Gold Price Chart Points to Losses After Major Top is Formed
Asian Stocks Mixed, Gains Seem Fragile Despite Stronger China GDP
Down Trend Resumption at Hand?
New Zealand Dollar Plunges on CPI
Netflix Stock Price Slides After Earnings, S&P 500 Sentiment Dented
March UK Inflation & GBPJPY Price Forecast
Bank Earnings Divided Ahead of Morgan Stanley

Crude Oil Price Continues to March Higher on Chinese Data, Inventories

Posted: 17 Apr 2019 03:13 AM PDT

Crude oil price, news and analysis:

Signs that China's economy is stabilizing and news that US crude oil stockpiles fell unexpectedly are supporting the crude oil price.
That's in addition to its recent strength on fighting in Libya and US sanctions on Venezuela and Iran.

Crude oil price buoyant

The price of US crude oil continues to rise as signs that the Chinese economy is stabilizing raise hopes of firm demand from the world's second-largest economy. In addition, data from the American Petroleum Institute released Tuesday showed crude oil inventories down by 3.1 million barrels in the week to April 12 when an increase of 1.7 million had been expected.

US Crude Oil Price Chart, Daily Timeframe (December 17, 2018 – April 17, 2019)

Chart by IG (You can click on it for a larger image)

This news is adding to the buoyancy of oil prices, which have already risen strongly this year on the current fighting in Libya and US sanctions on two other key producers: Venezuela and Iran. Meanwhile, oil prices have so far shrugged off talk of a potential end to production curbs by the Organization of the Petroleum Exporting Countries and its allies including Russia.

In the immediate future, traders will be waiting to see whether Wednesday's official data from the US Department of Energy confirm the drop in inventories but, as the chart above shows, there is little sign yet of an end to this year's advance in prices.

You can read much more about oil prices here

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— Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

2019-04-17 10:00:00

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Will Global Growth Rebound if the US-China Trade War Ends?

Posted: 17 Apr 2019 01:53 AM PDT

TALKING POINTS – GLOBAL GROWTH, US-CHINA TRADE WAR, FED, YEN, US DOLLAR

Aussie Dollar up on Chinese GDP, NZ Dollar down on CPI data
Sentiment may sour on Fed Beige Book, Morgan Stanley 1Q report
Fed quantitative tightening likely behind slowing global growth

ASIA PACIFIC TRADING SESSION RECAP

The Australian and Canadian Dollars rose as Chinese GDP data topped expectations, easing worries about a downshift in worldwide economic growth and boosting the cycle-sensitive currencies. The New Zealand Dollar underperformed following a disappointing CPI report but managed to erase good deal of its intraday drop after the Chinese data crossed the wires. The Euro retraced upward after yesterday's drop.

YEN, US DOLLAR MAY RISE AS MARKET MOOD SOURS

Looking ahead, the macroeconomic outlook will be informed by the Fed Beige Book of regional economic conditions as well as a first-quarter earnings report from Morgan Stanley. A downbeat tone on both fronts reflecting concerns about broad-based deceleration coupled with an assortment of lingering political risks – like Brexit and the looming European Parliament election – may sour the markets' mood.

The anti-risk Japanese Yen and US Dollar may lead the way higher in such a scenario while commodity-bloc currencies bear the brunt of selling pressure. Currencies positioned away from the poles of the G10 FX sentiment spectrum – such as the Euro, for example – may find themselves lower against JPY and USD even as they gain on overtly pro-risk alternatives.

What are we trading? See the DailyFX team's top trade ideas for 2019 and find out!

CHART OF THE DAY – WHY IS GLOBAL ECONOMIC GROWTH SLOWING?

Much has been made of the US-China trade war as a catalyst for slowing global economic growth, with many citing the seemingly manufacturing-led nature of the downturn as evidence. That has inspired hope that an accord between Washington and Beijing will bring back momentum.

A look at the evidence suggests this is unlikely. Total bilateral trade volumes between the US and China have looked choppy at worst since the pace of worldwide economic activity growth (tracked by JPMorgan PMI) started to slow in 2018. Rather, the cuprit seems to be the onset of quantitative tightening (QT).

The US central bank dialed up the pace of unwinding its bloated post-crisis balance sheet last year, marking the first time since the 2008 blowup that nonstandard policy support has been removed in earnest. It is this tightening that seems to have cooled growth.

The Fed continues to wind down its asset stock – albeit at a slower pace of $35 billion per month starting in May versus $50 billion previously – even as it has abandoned plans for further interest rate hikes rate this year. This hints that the slowdown will continue whether the US and China decide to play nice or not.

FX TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

2019-04-17 06:35:00

AUDUSD Outlook Positive After Firm Chinese Data

Posted: 17 Apr 2019 01:16 AM PDT

AUD price, Chinese data, news and analysis:

The latest economic growth, industrial production and retail sales data from China suggest its economy is stabilizing.
That has lifted the Australian Dollar, seen as a proxy for China, and a further advance is now possible.

AUD outlook constructive

AUDUSD, which is widely seen in the markets as a proxy for China, has firmed after the latest Chinese economic data and the rally could extend further.

The figures showed GDP in China grew by 6.4% year/year in the first quarter of 2019, unchanged from the previous quarter and just above the 6.3% predicted in a survey of economists. More importantly, industrial production was up a hefty 8.5% year/year in March, well above the forecast 5.9%.

Retail sales data were strong too, showing an increase of 8.7% year/year in March rather than the 8.4% expected. That boosted the AUDUSD price, which continues to rise within an upward-sloping channel on the charts.

AUDUSD Price Chart, Daily Timeframe (February 1 – April 17, 2019)

Latest AUDUSD price chart.

Chart by IG (You can click on it for a larger image)

The AUDUSD price is widely seen as a proxy for China because of Australia's reliance on exports to the country, which seems to be defying concerns about a further slowdown. However, while the numbers suggest that Beijing's fiscal stimulus is having a positive impact, it is still too early to forecast sustained growth.

Nonetheless, the technical picture is constructive and further AUDUSD strength is now on the cards as long as future data continue to point to China's economy steadying and optimism persists about a successful conclusion to the US-China trade talks.

Resources to help you trade the forex markets:

Whether you are a new or an experienced trader, at DailyFX we have many resources to help you:

— Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

2019-04-17 08:00:00

Gold Price Chart Points to Losses After Major Top is Formed

Posted: 17 Apr 2019 12:02 AM PDT

GOLD & CRUDE OIL TALKING POINTS:

Gold prices drop as yields recover, completing bearish chart pattern
Crude oil prices rise on API inventory data, but narrow range holds
Morgan Stanley earnings report, Fed Beige Book, EIA data on tap

Gold prices fell as Treasury bond yields continued to recover, with the rate on the benchmark 10-year note hitting a one-month high. The latest leg higher in lending rates followed the April 10 release of minutes from the March FOMC meeting, which traders judged as less dovish than anticipated. That has undermined the appeal of non-interest-bearing assets epitomized by the yellow metal.

Crude oil prices continued to consolidate in a familiar range that has contained momentum for a week. API inventory flow data showing US stockpiles shed 3.1 million barrels last week helped engineer an upswing, but the move ran out of steam in familiar territory just below the $65/bbl figure.

FED BEIGE BOOK, MORGAN STANLEY EARNINGS REPORT ON TAP

Looking ahead, the Fed Beige Book of regional economic conditions and the first-quarter earnings report from Morgan Stanley will feed global growth bets. A worried tone on both fronts reflecting slowing global growth might make for a defensive mood. Oil prices are likely to follow stocks lower in this scenario. EIA inventory data may offer something of a counterbalance if API's estimate proves telling.

Gold's immediate response will depend on the relative magnitude of divergent moves in yields and the US Dollar. A supportive drop in rates tends to clash with downward pressure from a stronger Greenback as haven-seeking capital flows flock to the currency's unrivaled liquidity in risk-off trade.

See the latest gold and crude oil forecasts to learn what will drive prices in the second quarter!

GOLD TECHNICAL ANALYSIS

Gold prices finally completed the previously identified choppy Head and Shoulders (H&S) topping pattern. Near-term support is in the 1260.80-63.76 area, but the H&S formation implies a measured downside objective near 1215.00. The pattern's neckline – now at 1281.31 – has been recast as resistance. A daily close back above that puts the 1303.70-09.12 zone back into focus.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices continue to tread water near support-turned-resistance in the 63.59-64.88 area. A break above this and the 66.09-67.03 inflection zone following immediately thereafter opens the door for a test of the $70/bbl figure. Alternatively, turn below support at 60.39 would invalidate the uptrend from December lows, making for a bearish near-term bias. The first subsequent layer of support is in the 57.24-88 region.

COMMODITY TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

2019-04-17 03:00:00

Asian Stocks Mixed, Gains Seem Fragile Despite Stronger China GDP

Posted: 16 Apr 2019 11:21 PM PDT

Asian Stocks Talking Points:

Equity put in a patchy performance despite strong data
Most indexes gained initially but some could not hold on
The US Dollar slipped back, with its Australian cousin gaining

Find out what retail foreign exchange investors make of your favorite currency's chances right now at the DailyFX Sentiment Page

Asia Pacific stocks were mostly higher on Wednesday thanks to some better-than-expected economic readings out of China.

Official Gross Domestic Product rose by 6.4% compared to the same period last year, better than the 6.3% tipped by economists, on average. Industrial production figures for March beat consensus by far more, and retail sales also exceeded forecasts.

Given all the recent worries about economic slowdown in various parts of the world, and the still-unsettled state of China/US trade there was obviously some relief in the markets that the world's second-largest economy appears to be at least treading water. That even this may be coming at the cost of increasing already high debt seems to be a worry for another day as far as investors are concerned.

The Nikkei 225 added 0.2% as its close loomed, with Shanghai up by a similar amount. The Hang Seng, ASX 200 and Kospi however failed to hold on in the green and were all down, if not by much.

The Australian Dollar scaled two-month peaks in the aftermath of that Chinese data and held most of those gains through the session. The US Dollar slipped modestly, with the Euro higher as risk-appetite got a fillip.

USD/JPY is heading up towards the top of its recent trading band.

However, recent daily ranges have been quite small, suggesting perhaps that indecision is rising in this market. Support at the range base is close at hand, at 110.86. This could be tested in short order.

Gold prices slipped a little after the Chinese numbers but inched back some ground later. Crude oil prices rose again as the market focused on supply risks exacerbated by rising tension in Libya.

There's plenty of economic life left in Wednesday's global session. Official inflation figures are coming up from the UK, Canada and the Eurozone. Trade balance data are also due from the US, along with wholesale and crude oil inventory numbers. Central bank watchers can look to the Bank of England's Mark Carney and the Bank of France's Francois Villeroy de Gallhau. Both are scheduled to speak in Paris.

Resources for Traders

Whether you're new to trading or an old hand DailyFX has plenty of resources to help you. There's our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There's also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they're all free.

— Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

2019-04-17 05:53:00

Down Trend Resumption at Hand?

Posted: 16 Apr 2019 06:52 PM PDT

NZD/USD Technical Strategy: NEUTRAL

New Zealand Dollar probes below 0.67 following soggy CPI figures
Confirmation still needed to make the case for downtrend resumption
Close above trend line from October'18 lows invalidates bearish bias

See our free trading guide to help build confidence in your NZD/USD trading strategy!

The New Zealand Dollar sank following disappointing CPI data, with prices on pace to register the largest drop in two weeks. A clear-cut breakout remains unconfirmed however as prices push up against support in the 0.6699-0.6727 area. This has been an important inflection region since July 2018.

A daily close below this barrier would strongly suggest that the downward trend against the US Dollar started in April 2018 is resuming and expose the next downside hurdle in the 0.6591-0.6619 zone. Neutralizing selling pressure probably needs a close above rising trend line support-turned-resistance, now at 0.6834.

In the meantime, traders may judge current positioning as unattractive for an actionable trade. On one hand, a short seems ill-advised from a risk/reward perspective as prices sit squarely at support. On the other, the absence of compelling evidence for a bullish reversal hints that taking up the long side is premature.

NZD/USD TRADING RESOURCES:

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the Comments section below or @IlyaSpivak on Twitter

2019-04-17 01:00:00

New Zealand Dollar Plunges on CPI

Posted: 16 Apr 2019 04:21 PM PDT

TALKING POINTS – NEW ZEALAND DOLLAR, CPI, RBNZ, CHINA GDP

NZD sinks as CPI data falls short of expectations
RBNZ has been expressing rate-cut inclination
New Zealand Dollar eyes upcoming China GDP

See our free guide to learn how to use economic news in your trading strategy!

The New Zealand Dollar plunged following the release of New Zealand CPI data after reports showed a 1.5 percent pickup, missing the 1.7 percent estimate. Overall, New Zealand's economic activity has been struggling to gain momentum against the backdrop of waning global demand. Since January, according to the Citi Economic Surprise Index, New Zealand's economy has been underperforming relative to expectations.

Chart Showing NZDUSD, NZDJPY – 15-Minute Chart

Overnight index swaps are pricing in a 62% probability of a rate cut by the Reserve Bank of New Zealand (RBNZ) by the September meeting. This follows last month's decision to hold the benchmark rate at 1.75 percent. This was accompanied by commentary by RBNZ Governor Adrian Orr that struck dovish tones as he elaborated on risks to the economic outlook shifting to the downside.

Looking ahead, the New Zealand Dollar will be closely watching the upcoming cascade of Chinese economic data, most notably the first quarter GDP figure. Since the eruption of the US-China trade war, the global growth outlook has deteriorated, weighing on the cycle-sensitive New Zealand Dollar. Furthermore, growing fears over slower global growth will likely continue to drive a dovish shift in RBNZ policy expectations.

See live coverage of China GDP data and the market reaction here!

FX TRADING RESOURCES

— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

2019-04-16 22:46:00

Netflix Stock Price Slides After Earnings, S&P 500 Sentiment Dented

Posted: 16 Apr 2019 02:31 PM PDT

Netflix Stock Price Talking Points:

Netflix's miss may prove troublesome for S&P 500 sentiment as the stock often serves as a bellwether for the tech sector
IBM also missed analyst's expectations, but pared losses as the after-hours session progressed
Interested in stock market sentiment? See how IG Clients are positioned on the S&P 500 with Retail Sentiment Data and sign up for one of our Sentiment Walkthrough Webinars to learn more about the tool

Netflix Stock Price Slides After Earnings, S&P 500 Sentiment Dented

Netflix (NFLX) released first quarter earnings after the close Tuesday, beating analyst expectations on both revenue and earnings per share. As the report was digested further however, future cash flow related to subscriber growth concerned investors and the stock traded nearly 8% lower immediately after release. As the after-hours session unfolded, Netflix shares recovered – down about 1.5% at the time of this article's publication.

Netflix Stock Price After Earnings

Netflix's reported first quarter revenue was $4.52 billion, equating to $0.76 earnings per share – notably higher than the expected $0.58. Still, the strong financials were not enough to outweigh the troublesome outlook for subscriber growth. While the streaming service added an impressive 9.6 million subscribers in the most recent quarter, second quarter additions were forecasted at only 5 million – beneath Street expectations of 6.09 million. Worrisome subscriber forecasts coincide with a new entrant to the streaming space – Disney. The impact of heightened competition will likely be of headline concern in future releases.

Alongside Netflix, International Business Machines Corporation (IBM) reported first quarter earnings but failed to meet revenue guidance and subsequently slipped in after-hours trading. Like Netflix, the stock pared initial losses as the report disseminated throughout the market.

Option traders anticipated notable volatility from both Netflix and IBM – something not uncommon for the former. That said, NFLX and IBM look to trade within the expected price range heading into Wednesday's session. In the coming weeks however, Netflix's implied volatility will remain heightened. As the first FAANG member to report earnings, the stock is often looked to as a bellwether for tech sentiment and a barometer for general equity sentiment. Once other tech stocks report, Netflix will likely find itself tied to the performance of the sector.

With the conclusion of bank earnings on Wednesday, tech will take the stage as the next key industry to watch as the season progresses. In the social media space, Twitter and Snapchat report next Tuesday. Following their reports, Facebook and Microsoft will report after next Wednesday's close. Follow @PeterHanksFX on Twitter for earnings season coverage. In the interim, the S&P 500 and Dow Jones will look to Chinese GDP – due to be released early Wednesday.

–Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you're looking to improve your trading approach, check out Traits of Successful Traders. And if you're looking for an introductory primer to the Forex market, check out our New to FX Guide.

2019-04-16 21:30:00

March UK Inflation & GBPJPY Price Forecast

Posted: 16 Apr 2019 01:54 PM PDT

Talking Points:

– The March UK Consumer Price Index is due on Wednesday, April 17 at 08:30 GMT.

– With the Brexit deadline having been punted to October 31, it's possible that the British Pound proves more sensitive to economic data in the meanwhile once more.

– Retail traders have increased their net-short GBPJPY positions over the past week.

Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.

04/17 WEDNESDAY | 08:30 GMT | GBP Consumer Price Index (MAR)

Rebounding energy prices over the past several months have seen inflation readings across the developed world stabilize at the start of 2019; the UK Consumer Price Index should be no different. The upcoming March UK inflation report is due to show headline inflation due in at +2.0% from +1.9% (y/y), while the monthly reading is due in a 0.2% from 0.5%. Core CPI is expected to have increased to 1.9% from 1.8% (y/y).

While the Bank of England's Monetary Policy Committee has repeatedly made clear that the lack of clarity over Brexit would give pause to any change in policy, thereby neutralizing the impact of economic data, with the Brexit deadline having been punted to October 31, it's possible that the British Pound proves more sensitive to economic data in the meanwhile once more.

Pairs to Watch: EURGBP, GBPJPY, GBPUSD

GBPJPY Technical Forecast: Daily Price Chart (December 2017 to April 2019) (Chart 1)

Since February 22, GBPJPY prices have traded in a range between 143.78 and 148.87. From one point of view, this means the cross provides little opportunity. From another point of view, the recent consolidation in GBPJPY price action may be akin to a coiling spring storing potential energy; the release of the kinetic energy, i.e. the breakout from the range, is worth waiting for.

Before a move towards either range resistance or support is achieved, price will need to leave the triangle that’s formed between the March 29 low and April 3 high. To this end, if GBPJPY price breaks above the April 12 high of 147.02, odds would increase for a retest of the broader range higher at 148.87.

On the other hand, if GBPJPY price falls below triangle support at 145.55/60 over the coming days, then the probability of a move back towards the broader range low at 143.78 would go up.

IG Client Sentiment Index: GBPJPY (April 12, 2019) (Chart 2)

GBPJPY: Retail trader data shows 43.9% of traders are net-long with the ratio of traders short to long at 1.28 to 1. The number of traders net-long is 2.9% lower than yesterday and 16.7% lower from last week, while the number of traders net-short is 14.1% lower than yesterday and 29.4% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPJPY prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed GBPJPY trading bias.

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher, email him at cvecchio@dailyfx.com

Follow him in the DailyFX Real Time News feed and Twitter at @CVecchioFX

2019-04-16 20:30:00

Bank Earnings Divided Ahead of Morgan Stanley

Posted: 16 Apr 2019 01:18 PM PDT

S&P 500 Outlook Talking Points:

Bank of America failed to impress analysts, weighing on the financial sector and the S&P 500
The sector will now look to Morgan Stanley's report due Wednesday as Netflix kicks off tech earnings
Interested in live currency analysis? Sign up for one of our free trading webinars.

S&P 500 Outlook: Bank Earnings Divided Ahead of Morgan Stanley

With earnings season well underway, bank results remain divided. After Goldman Sachs dragged the Dow Jones lower on Monday, Bank of America (BAC) followed suit on Tuesday, declining 2.25%. On the other hand, Blackrock (BLK) delivered a healthy earnings surprise, which saw shares climb 2.7% in Tuesday trading.

Two Dow Jones giants – United Health Group (UHN) and Johnson & Johnson (JNJ) – also offered split performances Tuesday. Together, the two corporations account for nearly 9.50% of the Industrial Average with United Health taking the lion's share. Three of the four stocks saw larger intraday moves than their average following an earnings report, with JNJ being the exception. Conversely, every stock saw a smaller reaction than one-day implied volatility had suggested – thus trading within the expected price range.

As financials conclude for the season, Morgan Stanley's (MS) report on Wednesday morning will deliver the last of the results from the banking giants. The Street is expecting $1.17 earnings per share on $10.00 billion in revenue. One-day implied volatility suggests Morgan Stanley shares will trade between $44.74 and $48.26 following the report.

Morgan Stanley Earnings Preview

While noteworthy, especially for the financial sector, the report may be overshadowed by the advent of tech earnings – namely Netflix. As a member of the FAANG group, Netflix is often afforded considerable influence over market sentiment. Follow @PeterHanksFX on Twitter for further market insight and updates.

–Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

2019-04-16 20:00:00